Question:
Assume the same facts as in E5–19, but that Richardson Systems reports under IFRS. How would your
answers change? (Assume for requirement 2 that separate shipment is part of the normal course of
Richardson’s operations, and successful customer installation is highly probable.)
Answer:
Requirement 1
Conveyer ($20,000 ÷ $50,000) x $45,000 = $18,000
Labeler ($10,000 ÷ $50,000) x $45,000 = 9,000
Filler ($15,000 ÷ $50,000) x $45,000 = 13,500
Capper ($5,000 ÷ $50,000) x $45,000 = 4,500
Total $45,000
Requirement 2
Under IFRS, it is likely that Richardson would recognize revenue the same as in
Requirement 1, because (a) revenue for each part can be estimated reliably and (b) the
receipt of economic benefits is probable.
Assume the same facts as in E5–19, but that Richardson Systems reports under IFRS. How would your
answers change? (Assume for requirement 2 that separate shipment is part of the normal course of
Richardson’s operations, and successful customer installation is highly probable.)
Answer:
Requirement 1
Conveyer ($20,000 ÷ $50,000) x $45,000 = $18,000
Labeler ($10,000 ÷ $50,000) x $45,000 = 9,000
Filler ($15,000 ÷ $50,000) x $45,000 = 13,500
Capper ($5,000 ÷ $50,000) x $45,000 = 4,500
Total $45,000
Requirement 2
Under IFRS, it is likely that Richardson would recognize revenue the same as in
Requirement 1, because (a) revenue for each part can be estimated reliably and (b) the
receipt of economic benefits is probable.
